Out of 34 municipalities reviewed, 22 received an F for their performance on housing starts and sales. Only Brantford and Milton stood out with top marks
Most municipalities in the Greater Golden Horseshoe have earned a failing grade for meeting housing targets, according to a new report from the University of Ottawa’s Missing Middle Initiative for the Residential Construction Council of Ontario (RESCON).
Out of 34 municipalities reviewed, 22 received an F for their performance on housing starts and sales. Only Brantford and Milton stood out with top marks.
The report, which drew on data from Canada Mortgage and Housing Corporation (CMHC) and Altus Group, found that housing starts across the region dropped by an average of 40% in the first half of 2025 compared to the same period over the previous four years.
The City of Toronto fared even worse, with starts down 58% and sales plummeting 91%.
“The findings of this report are troubling and should set off the alarm bells for policymakers across all three levels of government,” Richard Lyall, RESCON president, said.
“Housing projects have been shelved and the industry has hit a wall. The outlook is bleak, and we are trending in the wrong direction. We need governments to take concrete action to lower the tax burden and modernize the process to kick-start the industry. Our economy will be in dire straits if we do not act quickly.”
This follows a CHMC report that revealed that Canadian home construction slowed in August, with new housing starts dropping 16% from July to 245,791 units. This decline came even though the six-month average for new builds edged up slightly.
Sharp declines in sales and employment
Pre-construction sales—a sign of future building—have plunged, with condo sales down 89% and ground-oriented sales down 70%. The slowdown isn’t just in condos; starts for nearly all types of housing dropped 42%, except for purpose-built rentals, which rose slightly by 8%. This sharp decline has led to major job losses, with about 24,000 person-years of employment lost across the region and over 10,000 jobs lost in Toronto.
According to new Toronto Regional Real Estate Board (TRREB) data, the average home price in August dropped 5.2% from last year. Condo prices in the 905 region fell even more, down 10.6%. Condo sales also continued to slide, falling 3.4% in the city centre and 7.7% in the suburbs compared to last year. So far this year, total condo sales are down 16.6% from the same period in 2024, which are creating plenty of challenges for appraisers.
Calls for urgent government action
Industry leaders and researchers have called for immediate intervention. “Both the federal and provincial governments have committed to doubling housing starts,” Mike Moffatt, economist and founder of the Missing Middle Initiative, said.
“Unfortunately, housing starts are falling, and new home sales show that further declines in starts are about to come. All three orders of government must act to address the housing crisis,” Moffatt said.
The report arrives as policymakers face mounting pressure to address affordability and supply issues. “We are in the midst of the worst housing crisis in a generation,” Lyall said. “While the situation is bad it could get worse if governments fail to reduce the tax burden on new housing,” Lyall said.
Canada needs to build 3.2 million new homes over the next decade to restore affordability, the parliamentary budget officer warned. But the country isn’t keeping up—only about 227,000 new homes are expected each year until 2035, falling 65,000 short of the annual target.
On the other hand, TD Economics’ latest forecast showed that housing stood out as a bright spot, thanks to lower interest rates and steady consumer spending. The report noted that while the broader economy contracted by 1.6% in Q2, housing activity bucked the trend, responding quickly to Bank of Canada rate cuts and government support for purpose-built rentals.
However, the report cautioned that the long-term contribution of housing to overall growth will continue to be constrained by persistent affordability challenges and slower population growth.
